SC respite for Sonia and Rahul in National Herald Tax Case

New Delhi, Dec. 4 : Despite the Income Tax department’s defiant resistance to the order, the Supreme Court on Tuesday restrained the department from taking coercive action against Congress president Rahul Gandhi and Sonia Gandhi in a tax re-assessment case relating to the National Herald controversy.

A bench headed by Justice AK Sikri issued the restraining order against the I-T department and fixed the matter for hearing on January 8. The order stated that the department may go ahead with the estimation of incomes for Gandhis for the assessment year 2011-12 and even pass the final order but it cannot enforce it.
The I-T department was never restrained by any court to proceed with the reassessment but it has not finalized the order till date.
Solicitor General Tushar Mehta opposed the Court’s order, saying the matter does not deserve to be even admitted and that the interim order was unpropitious for the I-T department.

“I can say that this order is not in our favour. I will urge the Court not to pass such an order. Give me ten minutes and I can convince the bench that this appeal is liable to be dismissed straight away,” Mehta submitted.

But the bench said that its order is “equitable” for both the sides and that the Court deems it appropriate to pass the interim order because it cannot hear the case at length today.

The Court also made it clear that the interim order was being passed although the case was not heard on merits till date.

Rahul Gandhi, Sonia Gandhi and Congress leader Oscar Fernandes had petitioned against the reopening of their tax assessments related to Associated Journals Ltd, the publisher of National Herald newspaper founded by former Prime Minister Jawaharlal Nehru.

The Delhi High Court had in September dismissed their petitions, clearing the way for the Income Tax department to scrutinize records for the year 2011-12.

The Tax department has accused the Congress leaders of having “devised the scheme involving pre-ordinate artificial and fraudulent steps to take over Associated Journals Limited”.

The income tax probe against the Congress leaders has arisen from the investigation into the private criminal complaint filed by BJP leader Subramanian Swamy before a trial court in connection with the National Herald case, in which the trio are out on bail.

In the complaint before the trial court, Sonia, Rahul and others have been accused of conspiring to cheat and misappropriate funds by paying just Rs 50 lakh, through which Young Indian (YI), the not-for-profit organization, had obtained the right to recover Rs 90.25 crore that the Associated Journals Ltd (AJL) owed to the Congress party.

It was alleged that YI, which was incorporated in November 2010 with a capital of Rs 50 lakh, had acquired almost all shareholdings of the AJL, which was running the National Herald newspaper. In this process, YI had also acquired AJL’s debt of Rs 90 crore.